ATO Car Expenses for Tradies: Electricians, Plumbers, and Builders

Why the 5,000 km cap usually doesn't work for tradies

The cents-per-km method lets you claim 91 cents per business kilometre for 2026-27 (from 1 July 2026), capped at 5,000 km per car per financial year. For a tradie doing four or five job sites a day across a metro area, that cap can be reached in two to three months of work. Every kilometre beyond 5,000 km cannot be claimed under this method.

The logbook method has no cap. Once you complete a representative 12-week logbook and calculate your business-use percentage, you apply that percentage to all vehicle expenses for the year - fuel, insurance, registration, maintenance, and depreciation. There is no ceiling on the deductible amount, which makes a meaningful difference for high-mileage tradies.

Vans and heavy utes: different rules than a car

The ATO cents-per-km method and logbook method apply to 'cars' - defined as motor vehicles designed to carry a load of less than 1 tonne and fewer than 9 passengers. A standard passenger car, SUV, or small crossover is a car under this definition.

A single-cab ute, panel van, or dual-cab ute with a payload above 1 tonne is not a car under ATO rules. For these vehicles, you claim actual vehicle expenses directly as 'other work-related vehicle expenses' on your tax return - fuel, insurance, registration, maintenance, and depreciation based on business-use percentage. The 5,000 km cap does not apply. ATO guidance is at ato.gov.au under 'Other work-related vehicle expenses.'

Whether a specific dual-cab ute qualifies as a car depends on its payload rating, listed on the compliance plate inside the driver's door. Popular trade vehicles (Ford Ranger, Toyota HiLux, Isuzu D-Max) generally have payloads above 1 tonne, making them 'other vehicles' under ATO rules.

Home-to-first-site: when it is deductible

The drive from home to your first job site is a commute in most circumstances and is not deductible. The exception: if your home is your genuine base of operations. Many sole-trader tradies store their tools, ladders, and materials at home, do not report to an employer's depot, and start and finish the work day at the house.

If you meet those conditions, the ATO is more likely to accept the home-to-first-site drive as a business trip. Keep notes documenting that your home is where the business operates and that you carry tools and materials to each job. ATO guidance on 'Travel between home and work' explains the base-of-operations test.

Job-to-job site travel

Driving from one client site to another during the same working day is always business mileage, regardless of which claim method you use. This travel is not commuting because you are not going from home to a fixed regular workplace. Document the date, addresses, and business purpose for each leg.